City chooses Anthem plan that excludes Cedars-Sinai, UCLA

The city of Los Angeles has chosen an Anthem Blue Cross Blue Shield of California narrow network plan, which excludes Cedars-Sinai Medical Center and UCLA Health System, for its employees.

The Los Angeles Times reported that Anthem cut the two prestigious providers because of their high costs, which are as much as 50 percent more than competitors, but don't offer measurably better quality of care.

However, the Anthem plan chosen by city officials is a "standing offering for our employer groups in Southern California," not a new low-cost product designed just for Los Angeles, Leslie Porras, public relations director for Anthem parent WellPoint, told FierceHealthPayer.

"It's important to understand that the City of Los Angeles--not Anthem--made a decision to offer an Anthem health plan to its employees that excludes providers from Cedars-Sinai and UCLA," Porras said. The plan's network is fixed, so city officials didn't handpick which providers were in or out of network.

Cedars-Sinai and UCLA are some of the "most notorious" high-cost providers, so "taking out those physician groups produces a substantial difference in cost," Steven Scott, general manager of group sales for Anthem, told city officials, the LA Times noted.

"While the concept of narrow networks is not new, it is gaining increased attention from many customer segments--including small and large group," Porras said, adding that healthcare affordability is driving the "renewed interest in narrow network products because they can offer lower costs, in aggregate."

Insurers have responded to that interest by launching new narrow network products, including Aetna's deal with Virginia's Inova hospital system, Highmark's plan that made UPMC out of network and Harvard Pilgrim's new limited network that excludes its region's most expensive, and sometimes most popular, providers, FierceHealthPayer previously reported.